Forex


Forex are traded on the Foreign Exchange market, also known as Forex. This is a decentralized market that spans the globe and is considered the largest by trading volume and the most liquid worldwide. Exchange rates fluctuate continuously due to the ever changing market forces of supply and demand. Forex traders buy a currency pair if they think the exchange rate will rise and sell it if they think the opposite will happen. The Forex market remains open around the world for 24 hours a day with the exception of weekends. Before the Internet revolution only large players such as international banks, hedge funds and extremely wealthy individuals could participate. Now retail traders can buy, sell and speculate on Forex from the comfort of their homes with a mouse click through online brokerage accounts. There are many tradable currency pairs and an average online broker has about 40. One of our most popular chats is the Forex chat where traders talk in real-time about where the market is going.

Open 24 hours a day 5 days a week, the foreign exchange market is the largest and most liquid market in the world with volumes of over $4 trillion a day surpassing any exchange based market.


Foreign exchange trading involves trading one currency pair against another, predicting that one currency will rise or fall against another. Currencies are traded in pairs, like the Euro versus the US Dollar (EUR/USD).

Forex Spreads


IC Broker offers Forex traders some of the tightest spreads out of all Forex exchange brokers globally with our EUR/USD spread averaging 0.1 pips. Tight spreads combined with our low latency enterprise grade hardware makes IC Broker the ideal choice for active day traders and those using Expert Advisors. The table at the bottom of this page shows our minimum and average spreads across all of the major currency pairs.

How does Forex Trading work?


Forex trading is similar to trading shares or futures except that when trading foreign exchange you are buying or selling one currency against another and you do not take delivery of the underlying currency. One of the key advantages Forex has over other financial instruments is that relatively small lot sizes can be traded - lot sizes can be as small as 1000 units (one micro lot). Typically, foreign exchange also involves leverage which in some cases can be as high as 1:30, which is very different to trading shares where no leverage is involved.

Forex Trading Examples


The gross profit on your trade is calculated as follows:

Opening Price

€200,000 x 1.33623 = USD $267,246

Closing Price

€200,000 x 1.32129 = USD $264,258

Gross Profit on Trade

$2988

Opening the Position

The price of the Euro against the US Dollar (EUR/USD) is 1.33623/1.33624 and you decide to sell 2 standard lots (the equivalent of €200,000) at 1.33623.

Closing the Position

One week later the Euro has fallen against the US Dollar to 1.32128/1.32129 and you decide to take your profit by buying back 2 standard lots at 1.32129.

Start Trading


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OPEN TRADING ACCOUNT